Market Volatility Drives Demand for Guaranteed Insurance and Annuity Plans

Market Volatility Drives Demand for Traditional Life Insurance Products

In the face of rising crude oil prices and market volatility, investors are increasingly seeking stability over risk, according to industry experts. This shift is now evident in the life insurance sector, where demand for traditional guaranteed-return and annuity plans is on the rise, while appetite for unit-linked insurance plans (ULIPs) is moderating.

Canara HSBC Life Insurance has seen a notable decline in the share of unit-linked insurance plans (ULIPs) in its business. For the nine months ending December in FY2026, ULIPs accounted for 61 percent of the company's business on an annualised premium equivalent (APE) basis. However, by the end of the full financial year in March 2026, this share had fallen to 51 percent. In the last four months, the trend has sharpened further, with traditional guaranteed products now accounting for a larger portion of new business.

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The shift in market sentiment is being driven by a combination of factors, including volatile equity markets, elevated interest rates, and growing anxiety about future income among households. As a result, consumers are increasingly turning to traditional guaranteed insurance products, which offer a long-term guarantee of 15 to 20 years.

Anuj Mathur, Managing Director and CEO of Canara HSBC Life Insurance, pointed out that guaranteed insurance products offer a unique benefit that no other financial product currently provides. "There is no product right now in the market which gives a guarantee for long term except insurance. And when I say long term, I am talking of 15 to 20 years," he added.

Annuity products are also seeing strong growth, as customers increasingly focus on securing a stable post-retirement income stream. Rushabh Gandhi, CEO of IndiaFirst Life Insurance, agrees that there is a growing demand for guaranteed annuity products. "The ongoing geopolitical situation is increasing concerns around continuity of earned income. Customers are worried about employment risks, business pressures or broader economic disruptions that may impact household incomes," he added.

Gandhi attributes this trend to the growing concerns about income continuity among households. "Customers are turning to guaranteed annuity solutions to secure a stable and predictable income flow for the future, irrespective of external economic conditions," he explained.

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